This article originally appeared on GOBankingRates.com: How Long It Takes to Become a Millionaire in Every State
According to a recent GOBankingRates survey, most Americans think you need at least $1 million to be considered “rich.” Very few people actually earn a seven-figure salary, but it is possible to save $1 million even if you’re earning a median income — but that could take a while.
GOBankingRates calculated how long it would take a person in each state to be a millionaire in three ways: just by looking at household income, by taking cost of living into account and by taking cost of living and investments into account.
This study is focused on the third calculation, which assumes you earn the state’s median income, spend the average per capita for personal consumption and invest what’s left over. The calculation assumes a 5.5 percent return on investment, which is the average return on long-term investments.
For the U.S. as a whole, it would take 61 years to be a millionaire — or 65 years if you don’t invest. Find out how long it takes to be a millionaire across America.
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Methodology: GOBankingRates calculated how long it takes to be a millionaire in every state by using median household income data from Census Burea and annual consumption data from the Bureau of Economic Analysis. GOBankingRates found the difference between what a median household in every state earns and per capita consumption in every state, and divided that figure by 1 million in order to find how many years, days and months it would take to reach $1 million in every state. Figures were rounded to the nearest year.
Median household income was used for this study because per capita income wouldn’t cover the per capita consumption in every state. In addition, to account for investing leftover income, we took the difference between annual income and consumption expenditure and assumed it was invested in a portfolio with the average investor’s long-term average of around 5.5 percent, according to Zacks Investment Research.